Hindu Editorial Analysis : 19-February-2024

The recent ruling by the Supreme Court of India to strike down the electoral bonds scheme has stirred significant discussion about political funding in the country. This scheme allowed individuals and companies to donate anonymously to political parties, raising concerns about transparency and accountability in democracy.

What Are Electoral Bonds?

Electoral bonds are financial instruments that can be purchased by citizens and businesses in India. They were introduced in 2018 through amendments to various laws, including:

  • Representation of the People Act, 1951
  • Companies Act, 2013
  • Income Tax Act, 1961
  • Foreign Contributions Regulation Act, 2010
Key Features of the Scheme:
  • Anonymity: Contributors could remain anonymous, making it difficult to track who funds which political party.
  • Unlimited Contributions: The scheme allowed companies to donate unlimited amounts to political parties, removing previous limits.

Key Amendments

Several critical changes were made to existing laws to facilitate the electoral bonds scheme:

  • Companies could now contribute without a cap on their profits.
  • The requirement for political parties to disclose contributions above ₹20,000 was removed for donations made through electoral bonds.

Highlights of the Judgement

The Supreme Court’s ruling pointed out several violations, including:

  • Violation of Rights: The amendments were found to violate Articles 19 (freedom of speech) and 14 (equality) of the Constitution.
  • Privacy vs. Influence: The court emphasized that the right to privacy in political contributions does not extend to donations aimed at influencing policies.
Directives Issued:
  • The State Bank of India (SBI), the sole institution handling these bonds, was directed to stop issuing them.
  • SBI must provide details of all issued bonds to the Election Commission of India (ECI) by March 6, 2024, which will then publish this information online.

Rationale Behind the Judgement

The Supreme Court’s decision was based on several concerns:

  • Corporate Influence: There was a risk that companies could use financial contributions to sway political decisions in their favor.
  • Transparency Issues: The scheme lacked processes for public consultation, raising questions about its legitimacy in a democratic setup.
  • Potential for Corruption: The anonymity of funding could lead to corrupt practices and the creation of shell companies to channel funds.

Government’s Stand

The government defended the scheme, arguing that protecting contributors’ anonymity was crucial for their informational privacy regarding political affiliations. However, the court had to balance this claim against the potential risks of unregulated political funding.

Why In News

The Supreme Court struck down the electoral bonds scheme, which provides blanket anonymity to financial contributions to political parties, emphasizing the need for transparency and accountability in political financing to uphold democratic values.

MCQs about Electoral Bonds

  1. What was the primary purpose of the electoral bonds scheme introduced in India?
    A. To ensure public funding for political parties
    B. To provide anonymity to financial contributions to political parties
    C. To limit the contributions of corporations
    D. To increase tax revenue from political donations
    Correct Answer: B. To provide anonymity to financial contributions to political parties
    Explanation: The electoral bonds scheme was designed to allow individuals and companies to donate to political parties anonymously, raising concerns about transparency in political financing.
  2. Which article of the Indian Constitution did the Supreme Court find the electoral bonds scheme violated?
    A. Article 21
    B. Article 19
    C. Article 14
    D. Both B and C
    Correct Answer: D. Both B and C
    Explanation: The Supreme Court ruled that the amendments related to the electoral bonds scheme violated Articles 19 (freedom of speech) and 14 (equality) of the Constitution, highlighting concerns about transparency and democratic principles.
  3. What did the Supreme Court direct the State Bank of India (SBI) to do after striking down the electoral bonds scheme?
    A. Continue issuing electoral bonds
    B. Increase the number of banks handling electoral bonds
    C. Stop issuing electoral bonds and report details to the Election Commission
    D. Reduce the price of electoral bonds
    Correct Answer: C. Stop issuing electoral bonds and report details to the Election Commission
    Explanation: The Supreme Court directed SBI to stop issuing electoral bonds and to submit full details of all issued bonds to the Election Commission of India by a specified date, ensuring transparency.
  4. What was one of the major concerns regarding corporate funding of political parties through electoral bonds?
    A. It increased competition among political parties
    B. It allowed loss-making companies to make donations
    C. It limited the influence of foreign entities in politics
    D. It enhanced the financial stability of political parties
    Correct Answer: B. It allowed loss-making companies to make donations
    Explanation: A major concern was that the scheme allowed loss-making companies to donate, which could facilitate the creation of shell companies to channel funds to political parties, raising the risk of corruption.

Boost up your confidence by appearing our Weekly Current Affairs Multiple Choice Questions

Loading